Dr. Oz says commission churning for MA plan is big issue

[Special Agent]

I haven't read through this whole conversation thread. But there is no doubt that churning is an issue within the MA business model. My clients are telling me they are gettin hammered with calls lately, more than previous years.

Clearly the marketing rules are not working, despite stricter rules.

Last night I had a thought, that might just be the solution.... make all mapd agent and override commissions paid as earned. No more advancing. Like and Unlike plan change, as earned. Simple.

The whole community will make a sacrifice for the longevity of the business.

Dam straight. Go as earned commission it will drastically reduced agent count especially the fly by nights. Would work better than DOGE ing it.

 

[MedicareWAA]

He needs to look up the definition of churning. It would be different if we got paid something extra for moving clients from one plan to another. Entirely different when we get the same commission regardless of whether they stay put or move to a new plan.

Except we don't all earn the same amount of money. Add in overrides and soft money and the largest call centers can make $300-$600 in first year fees (on top of commissions) for moving someone to a new carrier. That drops substantially in year 2. So, rinse and repeat the following year.

The bigger problem is churning between agents. Agent A takes a client from agent B, agent C tries to take it from agent B, agent A somehow ends up back with the client, etc.

I guess my point is that we talk about commissions but there's a lot more money out there. Sometimes there's 2x the money in the fees. It's gotten ridiculous over the last few years.

What did we expect to happen when there are some carriers now paying $500 year 1 overrides plus an assortment of other comp? Oh, and not everyone can get that level. Misconduct and churn and unhappy clients are logical outcomes.

 

[EckoRomeo]

I haven't read through this whole conversation thread. But there is no doubt that churning is an issue within the MA business model. My clients are telling me they are gettin hammered with calls lately, more than previous years.

Clearly the marketing rules are not working, despite stricter rules.

Last night I had a thought, that might just be the solution.... make all mapd agent and override commissions paid as earned. No more advancing. Like and Unlike plan change, as earned. Simple.

The whole community will make a sacrifice for the longevity of the business.

That hasn't slowed the calls centers pushing ACA. It's the soft money. Only way call centers can cash flow is the money they receive in excess of the commissions. Commissions charge back, marketing money not so much.

 

[Winters Ins Agcy]

How does that solve the problem?

It would significantly diminish the opportunity for the bad actors to churn.

 

[sman]

Except we don't all earn the same amount of money. Add in overrides and soft money and the largest call centers can make $300-$600 in first year fees (on top of commissions) for moving someone to a new carrier. That drops substantially in year 2. So, rinse and repeat the following year.

The bigger problem is churning between agents. Agent A takes a client from agent B, agent C tries to take it from agent B, agent A somehow ends up back with the client, etc.

I guess my point is that we talk about commissions but there's a lot more money out there. Sometimes there's 2x the money in the fees. It's gotten ridiculous over the last few years.

What did we expect to happen when there are some carriers now paying $500 year 1 overrides plus an assortment of other comp? Oh, and not everyone can get that level. Misconduct and churn and unhappy clients are logical outcomes.

My view of churning is from the investment world where a broker constantly makes trades to earn additional commissions.

In the MA world, from the agent perspective, there's no real incentive to move your own client from plan to plan (churn) other than it's the right move. I'd LOVE to be able to leave all my clients on their plans. Less work, same commission.

Due to MA plans changing from year to year, some people need to change. Whether that's with their current agent, a different agent or direct with the carrier, that's not churning in my opinion. I can't speak for the extra money FMO's get.

 

[MedicareWAA]

My view of churning is from the investment world where a broker constantly makes trades to earn additional commissions.

In the MA world, from the agent perspective, there's no real incentive to move your own client from plan to plan (churn) other than it's the right move. I'd LOVE to be able to leave all my clients on their plans. Less work, same commission.

Due to MA plans changing from year to year, some people need to change. Whether that's with their current agent, a different agent or direct with the carrier, that's not churning in my opinion. I can't speak for the extra money FMO's get.

For individual independent agents, you're right. But for the giant call centers, they're the agent and the FMO, and the public accounting rules reward them for all the wrong activities. Womp womp. :(

 

[DonP]

My view of churning is from the investment world where a broker constantly makes trades to earn additional commissions.

In the MA world, from the agent perspective, there's no real incentive to move your own client from plan to plan (churn) other than it's the right move. I'd LOVE to be able to leave all my clients on their plans. Less work, same commission.

Due to MA plans changing from year to year, some people need to change. Whether that's with their current agent, a different agent or direct with the carrier, that's not churning in my opinion. I can't speak for the extra money FMO's get.

It's not churning put your fmo that was making $12.50 a month renewal overrides on your renewal business now makes a new $250-$300 override (2 yrs renewal override )on the new app you just wrote . It's like if you got a book of 1000 clients and you go to a new fmo before aep you negotiate $50k up front and $100-$150 an app override per app . That's all new business to them your going to write moving tons of clients

 

[sman]

It's not churning put your fmo that was making $12.50 a month renewal overrides on your renewal business now makes a new $250-$300 override (2 yrs renewal override )on the new app you just wrote . It's like if you got a book of 1000 clients and you go to a new fmo before aep you negotiate $50k up front and $100-$150 an app override per app . That's all new business to them your going to write moving tons of clients

But I'm not moving a ton of clients for any FMO. The only way I'm moving clients is if it's what's in the clients best interest.

 

[DonP]

But I'm not moving a ton of clients for any FMO. The only way I'm moving clients is if it's what's in the clients best interest.

Correct before this past aep i never moved more than 20-30 current clients people during any aep . I hate moving people . This aep i had 64 termed plans alone .I was well prepared this aep as i started getting scopes .drugs and doctors in Aug. I stop soliciting new business in mid aug .What I'm saying in todays chaos of massive plan changes and terms if you go to a new fmo your going to be moving plans . Listening to podcasts of some big fmo's with big relationships with carriers 2026 is going to be chaos again

 

[Winters Ins Agcy]

They got rid of the qtrly but added a monthly for full duals plus call centers will aggressively market csnp plans now.

The maintaining Dual SEP is gone. Has to be a change in status to qualify for the SEP in 2025.